MJ, could you explain why you used the formula for PV of a continuous payment for your first example"200a(bar)15), because from the question I see that its only a payment P.A and not continuous
Hey @MJ.....I m going to give my CT1 UK exams in this April 2017.I went through all of ur videos...and has improved my logic with this subject.Btw....In LIRR sum u have taken the equation wrong for the last third year bt u have posted the answer ri8...so do correct it.And thus year u r going to clear ur fellowship exams ri8?
+Amm A Sure thing. First of all you want to draw a timeline and mark off all the dates where a cashflow happens. Next you need to set up your equation of value. You are looking for the time needed to make the project profitable, so therefore you make the right hand side equal 0. (Technically Greater Than or Equal to 0). On the left hand side you need to put all the various cashflows with their discounted factor. This will normally be a large negative amount and a positive annuity for so many years. But instead of using the annuity term given to you, you need to replace this with an "unknown." This term value should be your only unknown in your equation of value and thus you can solve it. Always check to see if this term value is less than the annuities term. If not, it means their is no discounted payback period. If you need more help, let me know and I will get around to making a video on discount payback period :-)
MJ kindly make videos on the remaining chapters to help us in this exams.
Your videos are like revision for me at work.
Thanks and God bless...
will do. they may take some time cos the last few chapters are quite tricky.
Hey MJ! Can you focus a bit more on how to ascertain gestation period in dpp problems ?
Just found your videos. They are great!
+Hasnan thanks so much!! :) let me know if you have any video suggestions!
MJ, could you explain why you used the formula for PV of a continuous payment for your first example"200a(bar)15), because from the question I see that its only a payment P.A and not continuous
which notes app are you using?
Hey @MJ.....I m going to give my CT1 UK exams in this April 2017.I went through all of ur videos...and has improved my logic with this subject.Btw....In LIRR sum u have taken the equation wrong for the last third year bt u have posted the answer ri8...so do correct it.And thus year u r going to clear ur fellowship exams ri8?
please make videos on chapter 12th 13th 14th and 15th
and thankyou sooo much for this ond :)
hey..I'm finding difficulty with discounted payback period sums..can u pla explain it
+Amm A Sure thing. First of all you want to draw a timeline and mark off all the dates where a cashflow happens. Next you need to set up your equation of value. You are looking for the time needed to make the project profitable, so therefore you make the right hand side equal 0. (Technically Greater Than or Equal to 0). On the left hand side you need to put all the various cashflows with their discounted factor. This will normally be a large negative amount and a positive annuity for so many years. But instead of using the annuity term given to you, you need to replace this with an "unknown." This term value should be your only unknown in your equation of value and thus you can solve it. Always check to see if this term value is less than the annuities term. If not, it means their is no discounted payback period. If you need more help, let me know and I will get around to making a video on discount payback period :-)
thank you so much :)..this was really helpful
mj Actuary ..please can you solve a good sum of dpp ..because I'm not having a clear idea yet
sure thing. I will try get around to doing a video on it this weekend :)
great vids but if u had examples in each chapter would be nicer... but still great
Twrr= IRR and in your example they don't equal the same thing .... your teaching people wrong things 🤦♂️
I actually hate that you always skip your examples.. its so annoying! thats how i normally learn! through an example.
I'll keep that in mind for future videos :)